Spanish Industrial output falls to 18-month low in June as economic growth eases

Industrial output in Spain fell to an 18-month low in June, compared to the same month a year ago, following an easing in growth momentum in the euro area’s fourth-biggest economy, while negotiations still prevail over the formation of a majority government.

Industrial output on a seasonally-adjusted basis grew 0.8 percent in June from the same month a year earlier, marking the lowest reading since January 2015, data released showed Friday. On a monthly basis, industrial production expanded 0.2 percent. Those numbers fall short of economists’ estimates of 1.3 percent and 0.5 percent, respectively, according to a Bloomberg survey.

While the growth outlook may look promising, the economy remains stuck in a political deadlock following two inconclusive elections that failed to deliver the country any majority government. However, the country is scheduled to face a Sep 30 deadline to submit a 2017 budget and needs a government to do so.

Further, gross domestic product expanded 0.7 percent in the second quarter, the first slowdown in almost a year, although that is still twice faster than the euro zone’s pace of expansion. The Spanish caretaker government led by Mariano Rajoy expects the economy to grow 2.9 percent this year, before reducing the pace of growth to 2.3 percent next year.

Meanwhile, German factory orders data released earlier Friday declined in June coinciding with a slump in demand for investment goods within the euro zone in run up to Britain’s referendum to leave the European Union on June 23.